Kapchorua Tea & Williamson Tea Records Significant Jump in Net Income

Equities:

The equities market closed on a bleak state as portended by the market indices and the value of transactions. The NSE All Share index edged down by 0.56% to close at 145.43 points. The NSE-20 share index plunged marginally by 0.87% to close at 3784.56 points while the NSE 25 Share Index went down by 0.82% closing at 4109.41points. Market Capitalization contracted marginally by 0.57% to close at KES 2,063.30 billion while equity turnover bucked the trend, increasing by 41.86% to close trading at KES 0.564Bn. Market breadth slightly favoured decliners as 21 stocks depreciated in price against 14 advancers.

Kapchorua Tea Company Limited (KAPC) and Williamson Tea Kenya Limited (WTK) net income jumped 1,128% and 424% (respectively), for the period ended March 2016 attributed to high turnover, increased in crop and a weakened Kenyan shilling. Despite facing cropping patterns that resulted in erratic prices in the year, the agricultural firms (with shared directors) managed to honour its long term contracts during market peak that saw them realize a rise in profits from operations by 182% and 500% to KES 135 Million and KES 583 Million respectively. Crop increase were up 11% and 19% respectively, and the companies project any turnaround to the high crops, large volumes and low prices that marked the start of the year will be subject to prevailing weather conditions that will influence the law of demand and supply.

Kapchorua Tea Company and Williamson Tea Kenya recommended a dividend pay-out of KES 6 and KES 20 per share (respectively), subject to shareholders approval.

Equity Market Highlights

KCB Group Ltd (NSE: KCB) was the most actively traded stock today accounting for 23.64% of the total market value traded activity. Equity Group Ltd (NSE: EQTY) also registered high levels of activity, accounting for 16.18% of the total market turnover.

Pan Africa Insurance Holdings Ltd (NSE: PAFR) capped the gainers list, appreciating by 7.33% to close the day at KES 40.25. Williamson Tea Ltd (NSE: WTK)) went up by 5.98% to close the day as the second best performer at KES 209.00. I&M Holdings Ltd (NSE: I&M) emerged as the top loser of the day, plunging by 9.17% to close at KES 99.00. Carbacid Investments Ltd (NSE: CARB) similarly lost ground by 6.45% to close at KES 14.50.

Currency

KES Bucks the Bearish Trend

The Kenyan Shilling commenced trading by bucking the trend that ensued the previous week, with a lacklustre performance since the turn of the month; the local unit rallied against four of its seven peer comparables.

Against the US Dollar the shilling weakened by a mere 0.01% to close trading at 101.13, as sentiment on the former weighed heavy on its performance. Investor’s sentiment on the greenback became fragile ahead of the Federal Reserve’s monthly policy meeting, as expectations on a rate hike have been pushed back; after a dismal employment report for May showed the slowest rate of jobs growth since September 2010. The Kenyan shilling rallied against both the Sterling Pound and the Euro, by 0.35% and 0.37% (respectively). The local unit capitalised on concerns over the prospect of a British exit from the European Union, although a steady inflation rate in May capped losses for the pound.